Opinion: The Embattled Individual Mandate

Part of the unpopularity of the individual mandate stems from the fact that the public is not certain how the requirement will actually work.

Anyone with even a passing interest in healthcare or politics knows that the so-called individual health insurance mandate has become a legal and partisan battleground of historic proportions. With origins in conservative policy strategies to address failures of private health insurance markets, the idea that everyone should be required to have health insurance has become a symbol of government intrusion in our daily lives. Derisively dubbed socialistic or worse, it is no wonder that this provision of the 2010 Patient Protection and Affordable Care Act (commonly called the ACA) has public approval ratings nearly as low as the U.S. Congress itself.

The debate about the individual mandate reached a crescendo in oral arguments before the U.S. Supreme Court last month. Conservative justices grilled Solicitor General Donald Verrilli about the constitutionality of the health reform law’s minimum coverage requirement. While the nation’s highest court deliberates behind closed doors on the future of this provision, and possibly the entirety of the sweeping health law, some cable TV analysts all but declared health reform dead. The Intrade predictions market handicapped the likelihood that the Supreme Court would strike down the individual mandate at roughly 40 percent before oral arguments, but that prediction jumped to over 60 percent after oral arguments.

Some Supreme Court watchers are not as pessimistic; for example, Tom Goldstein, publisher of SCOTUSblog, puts the odds of the court striking down the mandate at just 40 to 60.

While the court could strike down the entire law, contingency planning by insurers, hospitals, state officials, and others undoubtedly now centers on more limited scenarios in which some insurance-related provisions fall along with the mandate but not the entire law. Permutations of which parts of the law might stand and which might fall are manifold. Even the Obama Administration argues that if the mandate goes, so should the requirement that insurance companies be prohibited from considering health status in decisions about whom to cover (called “guarantee issue”) and how they set premiums (called “community rating”). Indeed, Verrilli cited the failures of New Jersey’s guaranteed issue and community-rated non-group health insurance market in the 1990s in support of the idea that a mandate is integral to assuring stable health insurance markets. If the court strikes down guaranteed issue and community rating rules along with the mandate, it is not clear how the public will respond. In fact, polls show that regulations requiring insures to take all comers regardless of health are among the most popular features of the ACA.

As health care constituencies contemplate possible futures without the enrollment mandate, it is worthwhile considering what the mandate really is and why it looks unpalatable to the public in polls. The ACA would not send anyone to jail for being without health coverage. Rather, it would work something like W-2 wage statements that get stapled (or virtually stapled) to our tax returns. People without proof of purchase would pay a penalty when they file their taxes. In fact, for most of us who get covered by our employers, the proof of purchase will appear in Box 12 on our annual W-2 forms, and nothing else will be required of us to prove compliance with the mandate. It is also notable that people with incomes below the federal income tax filing threshold ($19,000 for couples filing jointly this year) will not be subject to the penalty for going without coverage. Moreover, millions of Americans would be eligible for sliding-scale federal tax credits in order to bring premiums within reach. Even with these new subsidies, people who face insurance premium contributions above 8 percent of household incomes will be exempted from the penalty.

Careful polling by the Kaiser Family Foundation shows that the public’s view of the coverage mandate is much more nuanced than recent public discourse would lead us to believe. In its monthly tracking poll, Kaiser asks respondents about the requirement that “nearly all Americans have health insurance by 2014 or else pay a fine, ”with only one in three responding favorably. But when given more information about how the mandate will really work, opinions change. For example, favorability jumps to 61 percent when respondents are told that most Americans would satisfy the mandate with their existing employer-sponsored coverage. The public’s take on the mandate is like views of cigarette taxes: the unaffected (non-smokers and people with job-based coverage) are big supporters. When told other details about how the mandate will work, opinions also shift toward more support. Support for the mandate goes to about half when people are told that without the mandate insurance companies would be allowed to deny coverage to the sick or that people for whom coverage was deemed unaffordable would be exempted from the penalty.

As is well known, the individual mandate was a central part of the 2006 Massachusetts health reform, which has an approval rating of about two thirds. Based on the Massachusetts experience (and well before it became the political football it is today), the Rutgers Center for State Health Policy fielded a poll question about the acceptability of an insurance mandate in New Jersey. As in Massachusetts, New Jerseyans’ views were positive, with nearly three-fourths voicing support for a coverage requirement. Of course, as the Kaiser data demonstrate, question framing is key. In that 2007 poll, we asked about support for the requirement to have coverage, noting that “People with higher incomes who do not have coverage would be required to buy insurance, and the government would help pay for those who can’t afford it.”

Regrettably, in the national dialogue on the future of health reform, ideology and political spin have once again trumped the facts. Even if the court upholds the health reform law, its fate is murky as we leap into the federal election cycle. To healthcare policy stakeholders I say: keep on contingency planning.

Joel C. Cantor is the director of the Center for State Health Policy and professor of public policy at Rutgers University. He has authored numerous studies of health insurance regulatory policy, healthcare delivery system performance, and access to care for low-income and minority populations. He serves frequently as an advisor on health policy matters to New Jersey state government.